Although the move is not a large one, economists are picking that the central bank will continue to increase the OCR until it gets to 5%-6%.
Ostensibly, the Reserve Bank uses the OCR just to control inflation.
New measures meaning retail banks have to source much of their long-term lending from domestic lenders are thought to be more effective for controlling interest rates and household consumption.
Bank of New Zealand chief economist Tony Alexander, who is picking the official cash rate to go to 6%, said there was no wonderful money-saving opportunity available in the market place for people seeking mortgages.
"You either stay floating or fix one to three years and either way you get hit in two to three years' time by high floating rates and higher fixed rates.
"If you fix now, you pay much more than current floating rates."
There was nothing canny borrowers could do to save interest expense for the next few years, he said.
For those who had held off fixing to enjoy low floating rates as long as they could, there was no point in waiting any longer.
The total money floating rate was estimated to rise to 6.75% in a year, 7.95% in two years and 8.25% in three years.
Current fixed rates for those periods were below that.
"If our forecasts of official cash rate rises prove correct, one will do better fixing than floating for any of those terms.
So, on the face of it, one would say it is best to fix rather than float."
However, there was uncertainty.
The Reserve Bank could raise the OCR more slowly than the BNZ predicted and that meant borrowers could still be in the situation of tossing a coin between fixed and floating, Mr Alexander said.
Unless mortgage borrowers fixed more than a year ago for longer terms, there was no way they could avoid paying a much higher interest rate at some point within the next three years.
The choice was between taking a low rate now and riding up to a high floating rate near 9% in three years, or locking in a rate well above the floating rate now, he said.
"Either way, you will pay that higher floating rate down the track or avoid it by locking in at a fixed rate higher than now, which will cost you when floating rates once again fall."
The only way to have avoided that rate rise cycle was to have locked in five to seven years, in late March last year, Mr Alexander said.
Dunedin financial adviser Peter Smith has a different view.
He believes it is still too early to fix mortgage rates.
Borrowers ran the risk of paying too much money in whatever time period they picked, he said.
Staying on floating rates gave borrowers more flexibility on what they did.
Even if the cash rate went to 4.5% by this time next year, there was still an opportunity now to pay off an extra $80 a month on a floating mortgage.
On a 20-year mortgage of $100,000, fixing now for three years would cost a borrower an extra $4100 over that term, Mr Smith said.
"That money could be paid straight on to the mortgage instead.
Paying off the mortgage is still the best investment you can make."
Mr Alexander said that on the other hand, term deposit investors could sleep easy at night.
Holders of term deposits did not have to worry about sharemarkets rising 2% one day and falling 3% the next.
"I don't have to worry about being psychologically slammed in coming weeks into cutting losses on equities if the market weakens a lot further and experts currently saying `hang in there' begin once again reminding us about how good the long-term is for equity investors."
Eventually it was good in the long-term and that helped the attractiveness of KiwiSaver, he said.
The problem was that holding equities involved buying risk and sometimes the price was high in the context of market volatility.
For the moment, being a term deposit investor felt good.
Investing in the short-term was acceptable because those short rates would be rising as the Reserve Bank tightened monetary policy, even though the pace of the tightening risked being less than forecast due to the worsening turbulence offshore, Mr Alexander said.
